April 12, 2012

Everyone is talking about Facebook buying Instagram this week, and not just the tech geeks. Why are people talking about, even those seemingly not of the geek mindset? Because everyone uses these two services. Well, maybe not everyone, but a lot of people: Instagram has 30 million users and Facebook is creeping up on on 900 million users. The real question is: why do people care that Facebook purchased Instagram (for a whopping $1 billion!)?

“Photos for Facebook are already a huge driver of both interactions and data. But while users often upload photos to Facebook, they actually take them with Instagram. The amount of data generated from a mobile device’s camera is significant, from location to time of day to any number of data points that can be associated with a smartphone’s sensors…

“Instagram itself was not in a position to capitalize off of its data. It did not have ads and it provided its API for free (with the right to charge the heaviest users if it deemed it appropriate). Implementing ads would be a recipe for disaster for Instagram and its fickle, emotional user base. But what if Facebook can take that data and provide ads against it without actually putting advertising into the app itself?

“Here is the trick: Facebook has the ability to grow Instagram’s user base by tens if not hundreds of millions of users. The more people use the app, the more of that rich metadata Facebook generates. Facebook can then turn around and serve ads against that data on both the Facebook desktop and mobile clients. It is a matter of linking the back-end infrastructures of the two companies without overtly changing the Instagram user interface.”

“In a general sense, this acquisition on the heels of the dramatic growth of Pinterest in the last few months is a massive reflection of just how fast the Social-Stream is becoming visual in nature, meaning evolving social engagement driven purely around visual media, not text – and just how valuable that will inevitably be to every major participant in the social media landscape,” Downing said. “This is a huge endorsement of the shift to the visual web and visual conversation in a social media framework.” {source}

Leverage mobile growth. Instagram is a mobile-only app. Facebook’s mobile app has always been less than stellar. Maybe Facebook is hoping to learn from Instagram.

“Instagram was beating Facebook at its own game, and the social network needed to stop it before it was able to do more.

“The photo-sharing app is essentially everything Facebook wants to be on your mobile phone. Facebook wants people using its mobile app to share photos of what they’re doing with friends and to share their location -– something Instagram users have no problem doing.”

“Smartphones are everywhere now, allowing apps like Foursquare and Path to be self-contained social worlds, existing almost entirely on mobile devices. It is a major change from just a few years ago, underscoring how the momentum in the tech world is shifting to mobile from computers.

“Cellphones are also prompting a shift in how people want to share things online, creating a market for apps that make instant sharing easy, said S. Shyam Sundar, a director of the Media Effects Research Lab at Pennsylvania State University.

“In other words, many people want to post a photograph of themselves right from a sun-drenched beach in Bali, rather than waiting until they are back home to upload all 50 pictures onto Facebook.” {source}

Now, let’s talk about why some users are so upset about the purchase:

Instagram was relatively private; Facebook is known for constantly-changing privacy rules.

“The app was limited to smartphone users, and there was no built-in way to copy or repost pictures — lent it a sense of privacy and intimacy, separate from the rest of our online lives. Its ability to let its users delicately toe the line between public and private gave us a little breathing room from the all-pervasiveness of Facebook, and to see it whisked away feels like a tangible loss.

“The sale of Instagram brings a harsh reality into focus, the realization that the secret rooms or private spaces online where we can share, chit-chat and hang out with our friends are fading.” {source}

“Part of the concern is that it’s Facebook,” says Chris Conley, an attorney at the ACLU of Northern California. “And their history of privacy and respecting user choices is mixed.”

“That mixed history includes Facebook’s repeated changes to the default settings of user accounts to make more user data public over time — a practice that has vexed advocacy groups, drawn charges of being overly confusing, and culminated in a settlement last fall with the Federal Trade Commission. Meanwhile, Facebook’s user count has continued to grow, and now surpasses 845 million.

“Instagram users thought they were signing up for a simple service, of relatively little utility to advertisers or government. Now that data is likely to be combined with an entire social graph. I picture the consumer happily paddling down a data rivulet only to find themselves suddenly on the open waters of the social sea.” {source}

The potential for limited sharing. Instagram has always encouraged sharing across a range of networks, with Twitter listed first. Users are worried that Facebook would limit that sharing to only Facebook.

“As regular Instagrammers know, one of the first choices you have to make in sharing your photo — after you’ve applied tilt shift and filters — is which social network you’re going to share it with.

“The two big sharing choices? Twitter and Facebook. No prizes for guessing which of those options may disappear, should Facebook get its way.

“Of course, Facebook has gone out of its way to assure users that sort of thing won’t happen. ‘We plan on keeping features like the ability to post to other social networks,’ wrote Facebook CEO Mark Zuckerberg in his blog post announcing the acquisition.” {source}

Instragram will be ruined by advertising. (Well, come on now, it was bound to happen!)